Nigeria Officially Embraces Cryptocurrency as SEC Grants Approvals to Operators

The Federal Government of Nigeria, through the Securities and Exchange Commission (SEC), has taken a significant step toward embracing cryptocurrency by granting operational approvals to several crypto operators.

This move comes after years of regulatory uncertainty and a series of crackdowns on the industry earlier in 2024, following the lifting of the official ban on crypto transactions in December 2023.

The government had previously blamed the cryptocurrency sector for contributing to the naira’s volatility, tax evasion, and terrorist financing, which led to restrictive measures.

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However, the recent approvals signal a shift in policy as Nigeria seeks to harness the potential of digital assets for economic growth.

 On Thursday, August 29, the SEC announced that it had granted “approval in principle” to two digital asset exchanges, allowing them to begin operations under its Accelerated Regulatory Incubation Program (ARIP).

Additionally, five firms, including Busha Digital Limited, Quidax Technologies Limited, Trovotech Ltd, Wrapped CBDC Ltd, HousingExchange.NG Ltd, Dream City Capital, and Blockvault Custodian Ltd, were admitted to test their business models and technologies under the SEC’s Regulatory Incubation Program.

This initiative was introduced to onboard firms that had started operations before the release of the Rules on Virtual Asset Service Providers in May 2022 and aims to evaluate the firms’ products, services, and technology in a regulated market environment.

 The SEC’s move is part of a broader government strategy to regulate the cryptocurrency industry while promoting economic development.

Zacch Adedeji, chairman of the Federal Inland Revenue Service (FIRS), emphasized the need for a comprehensive legal framework, stating,

“We need a law that regulates that area of our economy. This is why we are having this engagement with the legislators. We will regulate it in a way that is not injurious to the economic development of Nigeria.”

The SEC’s approvals are seen as a precursor to full registrations, ensuring transparency and investor protection as Nigeria positions itself as a significant player in the global cryptocurrency market.